Back in February, I posted a few quick (and somewhat non-technical) thoughts on why I bought into SAIL: http://discussion.fool.com/why-i-bought-sailpoint-technologies-s….
Bear noted that SAIL is growing slower than OKTA. When SAIL reported Q1 earnings on May 9th, their revenue was $49.7M and grew by 40% year-over-year. Revenue is split into three categories:
Licenses: $17M, +39% YoY (also down from $36.7M in Q4 2017)
Subscriptions: $23M, +54% YoY (up from $21.2M in Q4 2017)
Services & Other: $9.7M, +17% YoY (down from $9.9M in 2017)
At first glance, that made me wonder why revenue is trending the wrong way. Even SAIL’s Q2 guidance is showing revenue between $49.5M and $50.5M. However, looking closer at the Q4 2017 earnings report, each revenue category was up from the previous year:
Licenses: +65% YoY
Subscriptions: +51% YoY
Services & Other: +23% YoY
There is some seasonality in play, and I’ll need another earnings report or two to have a better handle on it. Also, 2017 ended up with $186.1M in revenue, and they are projecting 2018 full year revenue of $225M-$229M. Going back to Bear’s comment about SAIL growing slower than OKTA, that’s true, but I wouldn’t call their growth slow in general. OKTA had 67% YoY growth in Q4 2017. SAIL has had two consecutive quarters of +50% YoY subscription growth.
They’ve passed the May 16th lockup expiration, and the stock has rebounded nicely (up 18.8% since then). With a market cap of $2.34B and a P/S ratio of 10.4 when using the 2018 revenue guidance, I feel there is more run room and of course some more questions to be answered along the way. I’m staying in, and I’d expect both SAIL and OKTA to continue growing. I don’t think only one will continue to find success, rather both of them.
Note: I really appreciate all of the research and information that many of you post in this forum. I’m still learning what factors are important to analyze, and how to present my findings. I’d welcome any questions or suggestions on additional information to gather for a company like this that hasn’t been on the stock market for too long.